Deutsche Bank said it recorded a net loss of €409 million for the three months ending in December, nearly twice as large as analysts had expected, as revenues in its fixed income trading group slumped 23% to €786 million. Broader investment bank revenues fell 5% to €2.6 billion. However, the bank said cost cuts and headcount reductions, which will continue through 2019, helped the bank swing to its first full-year profit -- of €341 million -- since 2014
"Our return to profitability shows that Deutsche Bank is on the right track," said CEO Christian Sewing. "Now, our priority is to take the next step. In 2019 we aim not only to save costs but also to make focused investments in growth. We aim to grow profitability substantially through the current year and beyond."
Deutsche Bank shares were marked 2.8% lower in the opening hour of trading in Frankfurt and changing hands at €7.53 each, a price that values Germany's biggest lender at around €15.5 billion.
Sewing, who has been under pressure to deliver on the bank's turnaround plans since taking over from the ousted John Cryan in April of last year, declined to comment on speculation that has persistently linked the troubled lender to merger plans with Commerbank AG (CRZBY) in order to strengthen the balance sheets of both banks and allow for a more stable base of lending to Germany's small and medium sized companies -- known as the mittelstand -- which are the lifeblood of Europe's biggest economy.
However, Germany's powerful Verdi Union has said such a tie-up would result in massive job losses, and its leader, Frank Bsirske, who also sits on Deutsche Bank's supervisory board, said last week that merger plans were not the near-term focus of the bank.
Deutsche Bank has also been hammered by a series of negative headlines and scandals over the past years, the latest linked to European antitrust regulators charging four regional lenders with taking part in a bond trading cartel that lasted at least seven years.
Earlier this month, however, Bloomberg reported that Qatar's multi-billion sovereign wealth fund was in "advanced" talks with Deutsche Bank to boost its current holding, estimated at around 6.1%, while noting that the timing of such an increase was uncertain.
Last year, the QIA said it would invest around $10 billion of its $320 fund in German, while the fund's chairman, Sheikh Mohammed bin Abdulrahman Al Thani, hinted last week at the World Economic Forum in Davos that financial services firms could be potential targets.